SmartyPig

Will there be any strange fees or service charges added?

@Kate,

Great question. No new strange fees or service charges. Our plan is to continue to innovate and bring value to our customers each and every day as it relates to smart saving and smart spending. And I’m sure the next question will be how will this affect the interest rate. Although we reserve the right to change interest rates at anytime, we have no intention of changing our interest rate now or on August 1 when BBVA Compass becomes SmartyPig’s new bank services provider.

Mike Ferrari, SmartyPig co-founder

Actually, in the Consumer Deposit Agreement that I just read in entirety, it states that BBVA Compass has the right to charge a fee for deposits, and that we should refer to the Service Charge and Fee Schedule, but none is listed. This seems suspicious. I have been more than happy with SmartyPig so far, but I do not trust banking agreements.

Any possibility we might now be able to get online OFX for downloading into desktop personal finance software?

Just a thought — the email you folks sent out about this reads soooo much like a phishing email, complete with a direct login link from the email. Obviously all the images and addresses were legit, but I’m still glad I came here to verify the news, because the email gave me quite a bit of hesitation at first! Aside from that little moment of paranoia, the new alignment sounds like a good deal.

Mike,

Is BBVA open to expanding the competitive 2.15% APY rate to deposits > 50K? This is a big issue for all consumers now in a very scary economic climate.

Thank you for realizing that sending an email with a direct login link just screams “PHISHING” email! It sent up all kinds of red flags with me. I feel better after coming directly to the site and logging in. How quickly do we need to make a decision on this?

When I signed in to consent, there didn’t seem to be anywhere to click after choosing the “yes” option button. I can’t even access my account or log out. Am I missing something, or is there a problem with the website?

BBVA is a bank based in Spain. The current credit crisis in that region does not look good. How can we be assured that, if this spanish bank fails, our deposits will remain safe?

Mike, will we get a confirmation that we approved setting up the the new account with Compass? We also have Compass here in Arizona, btw. I did give my ok, but I don’t see that it was accepted or approved?
Thanks!

@Barbara, Beth:

I agree, I was leery as well, but went to the site via my normal route and all checks out okay.

@Mike: I would love for Quicken to auto update as well.

The first thing I checked when I read the announcement was the financial health of Compass Bank, and I was disappointed when I found out TheStreet gave it a D- (weak financial health) and Bankrate gave it only two stars (below performing). I am curious about your response to this. I know the bank is FDIC insured, but is there anything else that would inspire some more confidence?

@Will, not at this time.

@Don, there is no confirmation. If you would like to confirm, please contact support@smartypig.com. For those that opt-out, they will see an alert message in their user account. And they will also receive email reminders to close their SmartyPig account.

Mike Ferrari, SmartyPig co-founder

@LouL, @God at play, @Kristina,

Although a subsidiary of BBVA, BBVA Compass is a distinct legal entity and stands on its’ own two feet. BBVA Compass is regulated by the appropriate US agencies, and deposits are fully insured to the maximum amount allowed by law.

And while it is true that Europe is experiencing some financial stresses, BBVA’s Spanish Unit continues to perform extremely well, and has actually seen an increase in customer volume as consumers and businesses alike seek stable institutions to do business with.

As an important side note, neither BBVA Compass nor BBVA have received any government bailout money in either the US or Spain.

Larger banks like BBVA Compass, combined with their access to the financial markets are rated by one or more of the three major credit rating agencies – S&P, Moody’s and Fitch. These agencies have access to more detailed information about the company given their “insider” status under Reg FD. Additionally they prepare more detailed and highly complex analysis on rated companies.

BBVA Compass debt ratings compare very well to other rated companies, their peers and the financial industry. BBVA also compares very favorably and is one of only five banks in the world with a AA rating or higher.

On a final note, if you are unsure of your decision, simply say “no” now. You can change your mind later.

Thank you.

Mike Ferrari, SmartyPig co-founder

I know someone about about ability to download transaction via OFX into personal financial management software and the answer wasn’t clear. I would be interested in that capabilities as well. Can you either concur or deny if that capability will be available from BBVA or not?

Thanks.

I just want to say that I’m new to SmartyPig and I love it. It’s great that you are located in Iowa. I have been telling all of my friends and family about SmartyPig. You’ve made saving money fun and the 2.15% interest is wonderful. I love ING Direct, but you’ve beat them, too. Congrats on the new strategic alliance. Best wishes on continued success and growth. Tina in NYC.

I’m with Tina and Cheryl. Not sure if I’ll continue my account

I have some questions about the change. They aren’t necessarily for my own sake; they’re just things I think aren’t clear from the email and some people may be curious about.

1) What is the deadline for answering Yes or No to the authorization question? August 1 or some earlier date?

2) If I click Yes, am I obligated to not make any withdrawals (via closing my account and withdrawing at least some of the money to another bank) from SmartyPig?

3) My understanding is that closing an account and withdrawing money in the middle of a quarter does NOT result in the interest accrued since the end of the previous quarter being lost. For example, if one closes an account on Sept. 1, one gets to keep the interest accrued during July and August. Will the switch to BBVA change this in any way?

4) The email says that if I answer No to the authorization, my SmartyPig account will be closed and the money in the account will be returned to my funding source. When will that happen? And if I used more than one funding source, which one will receive the funds?

Thanks

First you cut the interest rate of your largest balance customers dramatically and now this. Not sure my money will be invested with Smarty Pig much longer.

BBVA Group IS a Spanish-headquartered bank…operating BBVA Compass out of Birmingham and BBVA Bancomer USA mostly in the Los Angeles area. http://www.bbva.com/TLBB/tlbb/jsp/ing/conozca/organi/index.jsp I’m sure they didn’t receive bailout money, as they wouldn’t be eligible as a foreign bank (though they bought Guaranty which WAS a sizable failed US bank that got bailout money).
BBVA Compass’ 2-star Bankrate rating means “below peer group”…1-star would be lowest rated, 3-star would be “performing”, 4-star = “sound” and 5-star = “superior”.
Banktracker shows their troubled asset ratio to be 4+X the national average…they have 4+X as many troubled loans on their books. Their CA-operated banks seem to be mostly Hispanic retail-geared. Interestingly, West Bank is also a bit stressed here with 2.5X avg troubled loans and also got bailout money.
Gosh, the interest is great and I’ve recommended Smarty Pig to a lot of people, but I’m going to bank American and move to VestMatch.com where my funds are held in banks of my choice.

I would like to invest more than $50,000.00 but SP states that my interest rate will drop drastically. Is it possible to open another a/c? Will the 2.15% be honored by BBVA?

If I reach my goal of $50,000 and have to close my account, can I re-open another account for @40,000? I would not want to leave money in the account anyway, due to the low interest rate on 50,000+. In other words, if I close one account completely, can I open another one? Thx

@Anna,
Yes. If you close (redeem) one goal, you can open another. Absolutely!

@Christine,
Yes. Login and recurring deposits will remain the same. In fact all functionality in your account will remain the same. You should notice no difference from a features and functionality standpoint.

Thank you.
Mike Ferrari, co-founder

Anna, I think you don’t understand that there is no reason to close your account to stay under the $50,000. If your goal reaches $50,000 and you close the goal the money would be transferred out of your SmartyPig account back to your regular bank. At that time you could open another goal in your SmartyPig and fund it with any amount you like less then $50,000 and still get the higher rate. You could also do it this way. Before you goal reaches $50,000 create another goal and fund it with the $25 minimum. Then you could transfer say $40,000 to the new goal, and then close the old goal.

@All,

Some of you asked for a visual confirmation after you opted in or out of the future transfer of funds to BBVA Compass. Once you have logged into your SmartyPig account and selected your opt-in status, you will now see an alert message confirming your selection. Great suggestion – and one we were happy to implement quickly. Here is a screen shot of my own personal account as an example.

Thanks again!
Mike Ferrari, co-founder

I am quite concerned by this change. I have looked around online, and found numerous customer reports about Compass, with a few happy examples, but mostly really disgruntled customers. For example, see the reports on this site: http://www.consumeraffairs.com/finance/compass_bank.html

It appears Compass was having trouble honoring the agreements made by other banks they took over. What are your plans to protect SmartyPig customers from similar issues?

Thank you,
C.S.

@Concerned Saver,
You will continue to be a SmartyPig customer and receive the same excellent customer service you have come to expect from us.
Thanks. Mike Ferrari, co-founder

Just seconding beth @ 10′s comment that that /really/ looked like a phishing email. Please don’t do that again – it makes it harder for everyone to distinguish legitimate communications from scams.

Mr. Ferrari –

I have been watching SmartyPig for a while and was going to open an account with you all when I saw the information of your new strategic partnership. I also did some investigation on Compass and was dismayed to find that their rating was less than good. I am also dismayed that you didn’t respond directly to @Charlie @Cheryl and @Concerned Savers’ concerns. This concerns me. I love this idea, however…

Valerie,
Thanks. I responded to @Concerned Saver in-line. As it relates to comments and questions from others, there were some common themes. I posted a comment to “@All” this morning noting that in the interest of transparency, we’ve updated the blog post above with a note from our CEO that should provide some additonal context. Thanks again.

Mike Ferrari, co-founder

Hey thanks Mike, that’s good info to know. It seems one could answer “yes” to my question about more solid footing/greater reputation.

But maybe that’s a dicey thing to say publicly.

Mike, As indicated by the following copied excerpt from the SP Website, saying No now will result in prompt closure Of my SP account. “No, I do not authorize the opening of a new BBVA Compass savings account in connection with my SmartyPig account. I understand that by saying no, my SmartyPig account will be promptly closed.” I do NOT want to close my account now, but simply want to access it without making a decision. Surely, this can be done. Thanks

I understand. We should change the text to better clarify. Simply say “no” now and hit “save”. You can change your mind later. Please send an email to support@smartypig.com if you need additional assistance.
Thank you.

Mike Ferrari, SmartyPig co-founder

Compass Bank (The BBVA is not recognized on the FDIC site) located in Birmingham AL is heavily invested in Derivatives, Swaps, and Restructured Mortages. Is that something to worry about?

Without knowing exactly what information you are referring to, like most banks, BBVA Compass limits its interest rate risk with interest rate swaps. These are not the mortgage backed derivatives you may have read about in the press.
Thank you.

Mike Ferrari, SmartyPig co-founder

i opened my sp account in january. ive since been jerked around like a hot potato as to interest rates, balances, ownership, deadlines etc. in the space of months. the aggravation factor has become a prime consideration. im leaning against extending this frustration without a compelling vision of the future of this merry go roud.

Ed, thanks for the note. As a startup, we will continue to enhance SmartyPig. And with our recent growth, a move to a new bank was absolutely necessary as Bob detailed in the blog above. If there is one thing we’ve tried to do, is be incredibly transparent and proactive with our customers. I’m not aware of any financial institution who provides such a competitive interest rate (currently we are about 2x ING Direct), transparent access to executive management, and a blog that allows open dialogue with their customers. In the end the decision is ultimately yours. A decision that should you choose to go elsewhere comes with absolutely no penalty to you. Our vision is simple. We will continue to listen to our customers and create innovative products and features that will benefit our core user base. I love getting emails from our customers. I receive 10-20 emails/tweets/facebook posts daily about how to make SmartyPig even better. This is exactly how we will continue to grow our business. We hope you share in this vision. If not, we wish you the very best and as always, encourage you to continue to save.
Thank you.

Mike Ferrari, SmartyPig co-founder

I tried to check my account, but was stopped by the notice that I had to agree immediately to stay or my account would be immediately closed. Not wanting to have my account closed immediately, I stopped. I wrote to tech support & was told that I could click “no” & get access; the account closure would not be immediate I did so. Now you barrage me with daily UNfriendly and innaccurate email insistence that I “must” close my account “now.” This poor communication and bullying has made my decision easy. You don’t want my business. The obnoxious daily emails pushed me over the edge.

Thanks so much for your reply, Mike! I’ve already accepted the transfer for my account, but I still wanted to relay those questions so that we could be certain. I really appreciate your effort here =)

Ammendmet to comment #69. Sorry I blogged to soon, the site is a lot clearer now, as to the time line and when the accounts will be closed, but its seems that the Emails to close the account keep on coming.

Thanks
Joe

Great to hear! I live in Birmingham and have been a Compass Bank customer for nearly 20 years, and they have been fantastic. No fears, anyone.

Bob & Mike:

Great blog! Helps a lot with my understanding and comfort-level. Two points:

1. Innovation is great, but FDIC insurance and a high interest rate are the reasons many of us deposit at S’Pig. When you capped the rate for funds over $50k, many of us were forced to shift money between goals and close some goals to get our total below that limit. So, if you can find an FDIC-insured deposit bank that pays the same rate over $50k, please consider raising that cap….you would get more deposits and more savers.

2. Bob wrote, “BBVA Compass is a U.S. based bank headquartered in Birmingham, Alabama ….and have a parent company headquartered in Madrid, Spain with deposits of over $765B in deposits and 48M clients….they have never received any bailout from any government, and operate with a strong balance sheet.” True, but irrelevant.

And Cheryl wrote, “BBVA Group IS a Spanish-headquartered bank…operating BBVA Compass out of Birmingham and BBVA Bancomer USA mostly in the Los Angeles area. http://www.bbva.com/TLBB/tlbb/jsp/ing/conozca/organi/index.jsp I’m sure they didn’t receive bailout money, as they wouldn’t be eligible as a foreign bank. BBVA Compass’ 2-star Bankrate rating means “below peer group”…Banktracker shows their troubled asset ratio to be 4+X the national average…
Gosh, the interest is great and I’ve recommended Smarty Pig to a lot of people, but I’m going to bank American and move to VestMatch.com where my funds are held in banks of my choice.”

As a taxpaying citizen, I’m against mega-bank bailouts, but I don’t base my savings on that..or even on “troubled asset ratios” or Bankrate stars. I only look for FDIC insurance and a high interest rate with minimum hassles and fees.

That said, who owns Compass Bank-USA or their financial health is IRRELEVANT, since the owner (BBVA Group, Spain) is under no obligation to rescue its US bank….which is not a branch of the Spanish bank, but a wholly separate entity and which can fail without intervention by its Spanish owners. Only the FDIC must intervene. Remember that rate of return correlates with rate of risk.

So to me, the above is mostly noise and I will remain a Smarty Pig customer (up to the $50,000 limit) and will encourage others to join (for the 2.35% interest rate and FDIC-insurance). Thanks, Bob & Mike, for the innovation that provide those benefits.

T.

I just read the updated info and all I can say is “Thanks!” I’ve never dealt with a bank that is as straight-forward and helpful as SmartyPig. At first I was leery to switch to the new bank, but now I fully trust that if the pig looked into it, it has to be great. Thanks for the info and keep up the great work!